Internal labour development, your greatest weapon in the war for talent


Phiona Martin told guests at CHRO Day 2022 that winning the war on talent is an inside job.

Whether it is a real thing or just propaganda, organisations need to look internally to be well-equipped in the war on talent, says award-winning organisational psychologist, career coach, and thought leader Phiona Martin.

The war for talent is ultimately aggressive competition in the labour market, she told a room full of HR executives at this year’s CHRO Day. The term was coined as far back as 1998, but the situation has intensified, mainly due to technological disruption and the Covid-19 pandemic, and with that comes a double dilemma.

“Long before Covid-19, we saw acute shortages of work, and new jobs were being created at such a fast rate, with no existing pipeline for those roles,” said Phiona. “This means that with each introduction of a new role there is an acute skills shortage that comes with it, and even when those shortages are resolved, there are new jobs that are still emerging. I predict this happening in perpetuity for many years to come, for as long as we have these technological disruptions.

“Another contributing factor in the war for talent is that people now have more options than they had before. The psychological contract has changed and people are more inclined to have more than one job,” she added.

She also noted that the war for talent is not just a war for any type of talent, but a war for the very top skills. “The game-changing skills that can change your organisation for the better have become extremely valuable and the highest in demand.”

According to Phonia, from a talent management perspective, there are different strategies that can be employed. She shared some examples of programmes that she has run herself aimed at addressing critical skills shortages: the buying strategy, where you go into the labour market to recruit, or the borrowing strategy, where you use contingency labour.

She did, however, point out that organisations cannot recruit themselves out of the war for talent. This, she said, was an expensive strategy and organisations should rather explore a build module, which focuses on or drives internal talent.

“If we look internally, we can create our own internal labour market. A real focus on internal labour development has several benefits: companies that have strong orientation towards developing talent become talent magnets themselves, a critical driver in retention,” noted Phonia.

“Internal focus also aids you in retaining institutional knowledge, which involves unique skills an employee has that can only be acquired by working for that particular organisation. In addition, you are also building individuals that have already demonstrated a culture fit, and this is important, because we have found that 30 percent of executive placements do not succeed because they lack a culture fit,” she said.

Building a great talent programme

Although money and investing are crucial parts of building a good talent programme, there are other elements outside of money, and critical success factors such as executive support. “An executive sponsor is crucial when attempting to create skills for senior level positions for succession planning, and it has to come from the office of the C-suite or senior management. These individuals must become the custodians of that programme to address the skills shortage in their division,” she said.

“One example of a talent management programme we had previously deployed in the past, involved senior executives enrolling their leadership team in this programme by way of a pairing model, where they took high potential candidates who underwent a competitive process and then paired them with senior executives. This gave the candidate skip-level exposure to mentorship by experienced senior executives who also became responsible for the development of those individuals. Largely experimental in nature, the talent management programme required a lot of support from HR as well.”

According to Phiona, the talent management programme in question was essentially designed by the C-suite in collaboration with the HR practitioners, and the return on investment was measured by capability and skills, and who would be appointed as the next senior leader at the end of this experimental programme. “We were also very aware of the fact that lowering risk and promoting diversity from a succession planning point of view would not happen overnight and we had to play the long game over next 12 months with regular check-ins in-between.”

Phiona concluded that organisations who employ deliberate internal talent management programmes will garner great publicity and would also send out a message that their leaders are serious about developing individuals.

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